#allenstanford

Whistleblowing against fraud up 16x

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In May 2011 the Securities and Exchange Commission (SEC) introduced a new whistleblower program under Section 92 of the Dodd-Frank Act. This was partly in response to its much publicised failure to investigate the US$50bn Bernard L. Madoff Ponzi scheme despite being made aware of it multiple times by a whistle-blower, Mr Harry Markopolos, since 2000.

Markopolos wrote in his November 7, 2005 submission to the SEC,

“Scenario # 2 (Highly likely) Madoff Securities is the world’s largest Ponzi Scheme. In this case, there is no SEC reward payment due the whistle-blower so basically, I’m turning this case in because it’s the right thing to do. Far better that the SEC is proactive in shutting down a Ponzi Scheme of this size rather than reactive.”

The SEC now encourages whistle-blowing by offering sizable monetary awards (10 to 30% of the monetary sanctions collected). Successful enforcement actions as a result of whistleblowing have led to awards as high as US$50,000,000. As a result, the SEC has seen a 16 fold increase in claims over the last few years. The following charts are from the SEC.

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The SEC 2018 Whistleblowing Annual Report noted, “from program inception to end of Fiscal Year 2018, the SEC awarded over $326 million to 59 individuals.

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On March 19, 2018, the Commission announced two of its largest-ever whistleblower awards, with two individuals sharing a nearly $50 million joint award and another whistleblower receiving more than $33 million.

As CM has been saying since whistleblower protections were enacted, those willing to speak out have surged. One can’t come out with false claims. Unsubstantiated claims are not paid.

As mentioned in the previous post, CM believes that climate scientists need an SEC-style watchdog to prosecute fraudulent claims which cost taxpayers billions in the misappropriated allocation of funds. If they do not commit fraud, they face no risks. To date, no scientists have been jailed or fined for data manipulation. By bearing no financial risk or threat of jail time, climate scientists are free to do as they please.

If Extinction Rebellion or any other alarmist group want us to declare “climate emergencies” they should have no problem submitting to a regulatory framework that ensures confidence in the data to drive the debate and allocate resources. CM guesses that they would howl in protest because after all emotion is more important that data. Torn asunder their antics would be undone by reality.

Why does climate science fraud go unpunished?

Why is it that whenever climate scientists get caught manipulating figures there are no repercussions? Let’s not kid ourselves. Governments around the world have splurged 100s of billions of TAXPAYER dollars on climate abatement that have been based on research that in numerous cases has been found to involve manipulation. Whichever way we cut it, fraud is fraud.

Take the financial sector as an example. There has been much malfeasance committed in the last few decades that have resulted in humungous penalties.

WorldCom CEO Bernie Ebbers was sentenced to 25 years based on nine counts of conspiracy, securities fraud and false regulatory filings to the tune of $11bn.

Enron’s former CEO Jeffrey Skilling was convicted on 35 counts of fraud, insider trading and other crimes related to Enron and sentenced to 24 years prison and fined $45 million.

Madoff got 150 years for his $65bn Ponzi scheme, Allen Stanford received 110 years jail for his $7bn fraud.

Yet when the scientific community commits fraudulent offences, they’re not even brought to trial.

Take the UNIPCC which was established by the World Meteorological Organisation (WMO) and the United Nations Environment Panel (UNEP) in 1988.

The Climategate email scandal in 2009 and the Climategate 2.0 in 2011 have shown far less faith internally than what is publicly admitted. They point to multiple cases of bullying dissenters, ignoring information that didn’t fit the narrative and data fudging.

NOAA was subpoenaed after Dr. John Bates, a recently retired principal scientist at NOAA’s National Climatic Data Center, exposes the Karl study which was used “to discredit the notion of a global warming hiatus and rush to time the publication of the paper to influence national and international deliberations on climate policy.”

Dr. Bates whistle blew on the Obama administration’s efforts to push a costly climate agenda at the expense of scientific integrity.

This was fraud. Data was manipulated ahead of the Paris summit. Developed countries committed to a minimum $100bn. The International Justice Initiative at the University of Tasmania, showed that “The total cost for developing countries to implement their Nationally Determined Contributions (NDCs) is more than US$4.4 trillion.”

Bernie Madoff looks a rank amateur compared to the implications caused by a fabricated NOAA publication. NOAA refused to comply with initially polite inquiries to answer whistle blower claims, baselessly arguing that Congress, its employer, was not authorized to request communications from its scientists.  Despite a congressional subpoena, NOAA kept ignoring its master. Some 6 months later they begrudgingly attended a committee hearing and were found out. Punishment? Nothing. Zero. Nada.

Perhaps if these same scientists were held to the types of punishment meted out to fraudsters in the financial world, their scientific publications would “cool” (no pun intended) to reveal the truth. Alas until they face significant penalties, the alarmism won’t abate (pun intended).

Blood seems thicker than water

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18 months ago CM wrote on Theranos (which was set to rule the blood analysis world) saying its biggest problem was gaining trust – not of the company itself but the switching costs for medical professionals to use it. It turns out it was really about a lack of trust, not with doctors but investors. Theranos swindled $700m over three years from investors yet the punishment will be that its founder Elizabeth Holmes pays a $500,000 fine, return 18.9m shares and face a ban from public companies for 10 years after the SEC charged her with “massive” securities fraud. Why no jail? Allen Stanford received 110 years for his $7bn Ponzi scheme. Fraud is fraud. Shouldn’t 1/10th the fraud lead to 1/10th the jail time?  Enron’s former CEO Jeff Skilling was fined $45mn with the $11bn failure of the company. Seems like not all fraud was created equal in the eyes of the law.